Has Hamilton's private jet landed him in tax trouble?

Sunday, 12 november 2017, 17:24

Lewis Hamilton has came under scrutiny after a leak of documents known as the Paradise Papers revealed his company accepted a VAT refund pertaining to business use of his private jet. But what does it mean for the world champion?

What are the Paradise Papers?

The Paradise Papers is a special investigation involving the Guardian, the BBC and over 90 other media publications across the world, into 13.4m leaked files from two offshore service providers and 19 tax havens' company registries.

Contained within the papers are secrets of how the wealthy hide their money through tax efficient schemes. A host of established figures, from the Queen to Gary Lineker, have been implicated.

What do the Papers say about Lewis Hamilton's tax affairs?

Formula 1 champion Lewis Hamilton is alleged to have avoided paying tax on his private jet, believed to be worth £16.5m.

The Papers show a £3.3m VAT refund was provided after his plane, the Bombardier Challenger 605, was imported into the Isle of Man in 2013.

Advisers to Hamilton were able to establish a leasing deal which did not comply with an EU & UK ban on refunds for private use, though it is unclear if he could have been entitled to one for business reasons.

Hamilton's lawyers have stated that a tax barrister review found the system to be within the law.

What has Hamilton allegedly done wrong?

The exemption applies to business use, but the Papers indicate that the 32-year-old intended to make private flights a third of the time.

His social media footprint shows holidays and other such trips taken in the jet. If private usage is being disguised as business usage, that could represent a tax avoidance scheme, because tax is entitled to be paid on private consumption.

Private jets bought outside the EU are subject to 20% VAT import tax. Hamilton's advisers formed a VAT-registered leasing business on the Isle of Man. This new company leased the jet from Hamilton's company registered in the British Virgin Islands and imported it to the Isle of Man.

On a monthly basis, Hamilton's advisers suggested that he would spend 80 hours on the plane per month, with his company using it for 160 hours. If this scenario were true, then only 2/3 of the VAT accrued should have been refunded - if at all.

There are thought to be 50 other schemes in the Paradise Papers identical to Hamilton's.

What was Hamilton's response?

Hamilton refused to be drawn on the topic ahead of Sunday's Brazilian Grand Prix.
"My team released a statement and I don't have anything else to add to that," he told reporters earlier in the week
"I'm planning to keep the pressure exactly the same as it's been generally all year ... my mentality coming into this weekend is to try and win."
Hamilton's advisers went into more detail, confirming their belief that their structure was legal.
"As a global sportsman who pays tax in a large number of countries, Lewis relies upon a team of professional advisers who manage his affairs," the statement said.
"Those advisers have assured Lewis that everything is above board and the matter is now in the hands of his lawyers."
It is unclear at this stage whether there will be a further investigation into the findings from the Paradise Papers. 

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Comments (36)

  • Douglas Corbett
    Jennie Warren, get your facts right ! None of the details exposed from an Illegal Hack are thought to be breaking the law. Now you may feel it is wrong and not ethical, however that's what governments are there to do with our laws. They can change the laws for taxation if they wish, however as many of them, especially in the UK, particularly the Pro Brexit MP's make use of these offshore tax havens, including David Cameron ! Even our Pension Funds use them and as was highlighted by many of those tax havens, they have an open system with HMRC and provide reports on the money being placed in their control, in an effort to ensure no illegal actions are taking place , such as money laundering. So are our pension funds needing to stop doing this !
  • Liam Scott
    Before I say this I am unequivocally not a Hamilton fan. I have no allegiance to any single driver or team. But what gets me is that he decided tomorrow to pay every single penny people think he owes it would make f**k all difference to anybody on here. People seem to get upset over things that have no bearing or direct impact on their own individual existence.
  • Alan Finkeldey
    This line 'The Paradise Papers is a special investigation involving the Guardian, the BBC and over 90 other media publications across the world' is enough reason to be doubtful of the information. Media publications, selling a product and a well known figure in sport...
  • Ian Miles
    Cannot see the problem. It is perfectly legal and it is the Isle of Man who gave the rebate within their own tax rules. These are scrutinized by HMRC who have subsequently checked that 250 planes registered there were eligible for a tax rebate...again.
  • Hassaan Ahmed
    Can afford to have private jet, luxury home in Monaco, supercars and diamonds on what not..... but poor Ham cant afford to pay taxes. Next time when you wave a Union Jack for a Tax Dodger just feel a little ashamed to say the least.
  • Vernon Naicker
    Nobody is above the law. The law also is open to interpretation by the companies that provide legal and financial advise. I don't think Lewis spends a Sunday afternoon doing his own taxes.... do you?
  • Lisa Berger Cartiff
    Typical rich boy spending too much time partying with Hollywood and not paying taxes. Must be nice to have that lifestyle. (Yes, I say that in sarcasm). Sounds like he needs to fire whoever is handling his finances.
  • Andy Hall
    It's frowned upon and a moral argument rather than illegal I'd also like to know how much he does pay Maybe then people wouldn't be so angry It's probably more a year than I pay in 20
  • Dean Williams
    This will just give all them pathetic Lewis haters ammo to just fire at him because they can not find a good reason inside the sport. To be totally honest what’s this got to do with F1.
  • Maciej Paul Dryja
    Illuminati jews want their presents back Hamilton ? They make you then they want to break you ? That's how it starts, gun robberies, car crashes. Change everything son
  • Shane Whyton
    There are way bigger fish to catch than Hamilton, look at the likes of google & Apple, he’s small change compared to them to tax evaders
  • Ricardo Gilperez
    I really don't get it. People with money evade taxes! ... And those with no money are always afraid not to paying 'em.
  • Hassaan Ahmed
    Legality of a crime doesn't justify criminality. If you want to be a star, act like one. Right now you're a Tax Dodger.
  • Kenneth Petrie
    Hamilton is not in tax trouble. Jealous people are talking aboujt Hamilton. He doesn't live here!
  • Malcolm Crick
    Jealousy, if we were him wouldn't we do just the same, YES I would, you lucky boy Lewis
  • Hansen Almani
    Is he the only Driver in F1.... I want to hear about other drivers ... SMMFHO
  • Jennie Warren
    He just thinks he is above the law, but karma always gets the man
  • Noël Yeung
    Just looking at the post caption, why is it that I “need to know”
  • Robert Gordon
    Sure are a lot of tax experts chiming in on this page.
  • Steven Ross
    Lewis, pay your taxes. Only Donald Trump is allowed no to pay taxes!
  • Patrick Parker
    Carin Roos and we just spoke about his jet the other day
  • Alan Cat Nicholson
    The Isle of Man is not part of the U K and is not a member of the E U
  • Fab Teidy Ricio
    Hamilton landed Hamilton in tax trouble
  • A John Bueche
    Why s Hamilton's jet Ferrari Red?
  • Col Fernando
    If I was that rich, I would do exactly the same.
  • Jamar Kelly
    No wonder why he wants a raise
  • Ed Ross
    This was talked about in the Paradise Papers.
  • João Júlio Manzi
    Keep crying nazi boys.
  • Martin Elliott
    Better ask Jimmy Carr.
  • Paul Brown
    Don't care.
  • Rob Jov
    Nick Petroski John Kolevski
  • Antonio Ridley
    Kyle Ridley
  • Dinesh Gupta
  • Tony Bowler

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